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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Credit Acceptance Corporation (XNAS:CACC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CACC
Name:
CREDIT ACCEPTANCE CORPORATION (XNAS:CACC)
Sector:
374.40M
Industry:
Credit Services
CEO:
Mr. Brett Roberts
Total Employees:
2,073
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -134.77% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CREDIT ACCEPTANCE CORPORATION(CACC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
521.36
One Month Price Target:
$525.33
Six Month Price Target :
$545.17
Likely Price in One Year's Time:
Ticker:
$568.99
Likely Trading Range Today Under (Normal Volatility)
$518.8
Price Upper limit ($) :
$524.81
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$485.47
This week:
$441.1
This month :
$360.84
Other Primary facts
Market Cap:
6.57B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
12.92M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
20.16%
-16.84%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$687.87
$611.18
$354.85
$431.54
Medium risk (<10%) entry points
Buy Call
Sell Call
$586.22
Buy Put:
Sell Put:
$569.84
$456.29
$472.88
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CACC
Sharpe Ratio:
2.25%
Comparison:
CACC, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 20.76% higher than the industry
& is -1.50% lower than the market/S&P 500 average
Average Returns/Yield of
CACC
Daily returns:
0.09%
Weekly returns:
0.43%
Monthly returns:
1.70%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is 7.05% above industry average
Classification:
CACC, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.86
Statistical test of Returns:
CACC has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.39%
Weekly Volatility:
7.59%
Monthly Volatility:
15.18%
Yearly Volatility:
52.57%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.26%
Volatility in last five trading days has been -62.81% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.88%
Weekly VaR:
-15.39%
Monthly VaR:
-30.79%
How Much Can the price of
CACC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-26%
Worst case (decline):
>85%
This translates to price declining to:
$384.50
This translates to price declining to:
$78.20
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CACC is a 117.30% riskier investment compared to the market/S&P 500 & is 86.16% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 2.83% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CACC
Beta in relation to market/S&P 500--1.36
Expected beta in 1 year's time:
1.191
Expected beta in 3 year's time:
1.685
Unlevered (debt free) Beta:
0.424
Beta in relation to Nasdaq (XNAS):
0.817
Beta in relation to all global stocks::
0.671
Beta Comparison & Analysis
Beta of competitors/peers::
1.26
Beta is 7.85% higher than peers
Average Industry Beta:
1.332
Beta is 2.05% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
44.85%
Sustainable growth rate is 32.94% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.079
Alpha is 17.05% above industry average alpha yield
Alpha is 506% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CACC
Equity cost of capital:
0.125
Equity cost of capital is 1.52% above industry mean WACC
Unlevered (without debt) cost of capital:
3.89%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$143.96
Revenue growth rate per share of (3Y):
4.14
Annual revenue growth rate is -52.69% below industry average
EPS:
$62.70
Expected Annual growth rate of EPS (3Y):
19.69%
Expected future EPS growth rate is -21.41% lower than the Credit Services industry
Free cash flow (FCF) per share:
$74.41
-
-
Debt per share
$366.75
EBITDA per share
$101.19
Valuation Analysis Today of
CACC
P/E Ratio:
9.75
P/E Ratio of Competitors/Peers:
15.3
P/E ratio is -36.28% lower than main peers & is -19.65% lower than the industry
Stock price/value with industry average P/E ratio: $761.02
CACC is -31.49% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.62
Price to sales ratio is -30.33% below the industry mean
P/B (Price to book value ratio):
4.14
Price to free cash flow: 7.01
Price to free cash flow ratio is -78.23% lower than the industry
Net income growth rate (3Y):
105.53%
Net income growth rate is 553.36% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
290.95%
Net debt to equity ratio:
289.87%
Debt to assets ratio:
67.33%
Net debt to assets ratio:
67.08%
Debt-to-asset ratio is -13.63% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
0.17%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 14.28%
Analysis of Key Statistics
Correlation of price movement with the market:
0.522
Statistical significance of correlation:
CACC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is -6.94% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.047
Covariance of price movement with the market:
0.093
Kurtosis
6.614
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.146
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CACC
Gross Profit Margin Ratio:
316%
Operating Profit Margin Ratio:
68.84%
Operating profit margin is 136.75% higher than the industry
Net Profit Margin Ratio:
316%
Effective Tax Rate:
24.24%
Effective tax rate is 11.97% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
59.58%
Return on equity (ROE) is 40.54% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
13.79%
Return on assets (ROA) is 127.56% higher than the industry
Financial Leverage:
3.1x
Current Ratio:
30.64
Current ratio is 430.42% above industry average
Cash Conversion Cycle (days):
1246.2
Cash conversion cycle is 839.02% above industry average
The remaining useful life of property plant & equipment is: 3.8 years
Stock based compensation to net income ratio:
0.94%
In-depth Efficiency Analysis
Revenue generated per employee:
897.3K
Each employee generates 24% more revenue than industry average revenue per employee
EBITDA generated per employee:
630.7K
Each employee generates 50% more EBITDA than industry average revenue per employee
Profit generated per employee:
468.2K
Each employee generates 93% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
180.6K
Each employee generates 209% more free cash flow than industry average revenue per employee
Assets/Capital per employee
73.6K
Each employee generates 209% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CACC
FIRST FINANCIAL BANKSHARES, INC. (XNAS:FFIN)
TRILLION ENERGY INTERNATIONAL INC. (XCNQ:TCF)
Upstart Holdings Inc (XNAS:UPST)
PEOPLE'S UNITED FINANCIAL, INC. (XNAS:PBCTP)
Popular Inc (XNAS:BPOP)
NAVIENT CORPORATION (XNAS:JSM)
SLM CORPORATION (XNAS:SLM)
SOUTHSTATE CORPORATION (XNAS:SSB)
BOK FINANCIAL CORPORATION (XNAS:BOKF)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�21%
Sell�17%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.86B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
390.10M
1.47B
-
73.10M
140.40M
67.30M
49.10M
189.50M
-
-
26.40M
1.31B
1.28B
970.50M
1.28B
310.60M
970.50M
Statement of Cash Flow
Date:
Period:
6.60M
Differed Income Tax :
11.00M
Stock Based Compensation :
9.10M
Change in Working Capital :
111.70M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
23.40M
Net Cash Provided by Operating Activities:
376.10M
Investments in PP&E:
- 1700.00K
Net Acquisitions:
-
Purchases of Investments:
- 11400.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
17.60M
-
17.60M
6.38B
-
488.00M
6.89B
56.70M
-
-
-
-
95.90M
152.60M
-
7.04B
224.50M
-
200.00K
-
200.00K
224.70M
4.74B
-
5.18B
-
5.41B
100.00K
1.42B
- 1500.0K
211.50M
March 31, 2022 at 6:00:00 AM
579.60M
1.63B
7.04B
-
4.74B
4.7B
8.80M
- 14200.00K
- 18500.00K
- 789500.00K
-
- 423000.00K
-
919.40M
- 293100.00K
-
64.50M
498.70M
434.20M
376.10M
- 1700.00K
374.40M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CACC
2023
2024
2025
2026
2027
$571.83
$901.16
$983.48
$1,073.32
$1,171.37